The federal government’s ongoing effort to cancel more than a billion dollars of pandemic-relief funds for schools is on hold in some states for the second time in less than a month, following a May 20 court order from a federal judge.
Lawyers for the U.S. Department of Education must file papers by May 29 explaining why a court shouldn’t stop the agency’s effort to end pandemic-relief funding programs early and then later defend that position at a hearing in early June, Judge Edgardo Ramos of the U.S. District Court of the Southern District of New York wrote. In the meantime, the court is temporarily barring the department from ending those programs.
The order applies only to the District of Columbia and the 16 states serving as plaintiffs in the lawsuit. After those upcoming proceedings, the states are seeking to have the judge extend the order to keep their COVID-relief funds available, direct the Education Department to process currently pending and future reimbursement requests for COVID-relief funds, and have the federal agency produce a list of all their pending reimbursement requests—which the states say have been delayed.
The affected states are Arizona, California, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Pennsylvania.
For the remaining states, more than $2 billion in pandemic-relief aid has been frozen since late March. The department is giving states the opportunity to appeal the cancellations for individual projects, but thus far has denied many requests, including for homeless-student services in Wisconsin, professional development for educators in Arizona, mental health services in Missouri, and construction projects in the territory of Guam.
A spokesperson for the Department of Education didn’t return comment in time for publication. The department has argued that the projects for which it’s denying extensions don’t directly support students academically.
Department efforts to block remaining COVID funds have faced numerous challenges
Congress allocated almost $200 billion in relief aid for K-12 education during the first year of the pandemic. Schools committed the vast majority of those dollars to specific expenses by September 2024 and “liquidated” or shelled out the vast majority of those dollars by January 2025.
But schools and education agencies in many states still had a small percentage of those funds left to spend after the January deadline—most often because they had already signed contracts for construction, tutoring, and mental health services that extended beyond the grant period. Between 2023 and early 2025, the Education Department approved formal requests from states to let schools continue spending those dollars, setting March 2026 as the deadline to disburse the last round of funding.
Secretary of Education Linda McMahon, however, told all states on March 28 that she had, effective immediately, canceled the previously extended period for COVID funds that schools and states had contractually committed by March 2026.
On April 11, top Democratic officials from 16 states and the District of Columbia filed a lawsuit aiming to reverse McMahon’s decision, which nullified extension approvals offered in some cases just months earlier by the agency under McMahon’s leadership. Ramos, an appointee of former President Barack Obama, on May 6 ordered the Trump administration to reverse the funding cancellation—but gave an opening for the funds to be frozen once again if the administration gave states 14 days’ notice.
The department took advantage of that opening, telling plaintiff states on May 11 that they and their school districts now have until May 24 to spend all the remaining pandemic-relief funds from programs like ESSER for public schools, EANS for private schools, and HCY for services for homeless students. (The department later admitted in a court filing that the May 24 deadline on its letter to states was a typo and that it should have been May 25, exactly 14 days after the announcement.)
With Ramos’ latest ruling, that May 25 deadline should pass without states losing access to their remaining pandemic-relief money.
Schools and states typically spend allocated funds first from their own accounts, and then the federal government makes them whole. Some states, including New York, still have pandemic-relief reimbursement requests they filed prior to the March 28 letter from McMahon that the federal government hasn’t yet fulfilled.
